Like so many of my blog posts, they start with a conversation. And like many of my blog posts, I have had similar conversations with many people that run along the same lines ...
Many people start their consultancy firm as the result of being made redundant. Then their previous employer contracts back with them to deliver the same service. This has advantages for both parties.
Their client gets a consultant who knows the business and is only obliged to use them for the hours they need with no add-on costs. The consultant receives a regular income at their most vulnerable time, when they are building their consultancy, often at a better hourly rate than before. The money still appears in their bank account every month, and the mortgage still gets paid.
Sometimes, the story has a slight variation. Maybe it isn’t their previous employer who gives them this regular work but - the Nirvana for many consultants - a new big client with a genuinely meaty project that is going to keep them busy and pay the mortgage for the foreseeable future.
Everyone is a winner and the pressure's off to find the next paying client, so you can focus on what you really want to do ... deliver the service you love. As this is the reason you set up your consultancy in the first place, it seduces you to invest deeper and deeper in this one client. Time marches on and somehow you’re not running a consultancy at all ... you’ve become what I call an employee without benefits!
If you’ve read anything at all about business, you’ll know that this is not a good idea. Anyone advising business owners will trot out the old adage of "never allow one customer to be more than 20% of your income".
As a piece of advice, it’s stood the test of time as the business world is littered with examples of small companies that went to the wall when their biggest client moved on and stopped using them, often with very little notice.
Well, many consultants simply have more customers. Problem solved. However, for some of you working single-handed, the nature of your consultancy is that you devote your working week to this one big client. There just isn’t the time to have at least 4 other similar clients.
If this is the case for you, I want to recommend investing in your networking to mitigate the risk of your wonderful big client deserting you.
- First, act as a consultant not an employee. Have a beginning, middle and end to your present contract with this client right from the start. This has definite benefits to you. You manage your own and your client’s expectations on what you will deliver and by when.
As the contract comes to a conclusion, you can re-negotiate a new one that suits you or agree how to hand over and move on. This gives you the mindset to invest time in your marketing and network. And it will provide you with the time-frame and impetus to line up your next client.
- Build a wide referral network. You will have limited time to market yourself, so why not get others to do it for you? Surround yourself with people who can identify and introduce you to your next big client.
Analyse all the people you already know. Who do they know? Who are their customers? Who else do they mix with who might know when there is an opening for your services and can introduce you? Have a strategy for getting out and about meeting these people and for keeping yourself 'front of mind' with them.
A word of caution here: social media channels may be a great way of doing this day-to-day, but build in some face-to-face contacts as these are still far more powerful.
- Get into credit with these referral sources and get into the giving habit. The best way of motivating someone to look out for opportunities for you is to do the same for them. Whilst you’re engaged in your long-term project, you may not want them to refer you at the moment, so this is a great time to get into credit on the giving.
Make sure you know what they want to achieve and how you can help them first. Then comes the day when you’re looking for your next client you can turn to them for help in return.
As you’ll know when that is likely to be because your project has an end date you can ask for introductions at the right stage of your sales cycle.
The power of a proactive network means that you can have just one big client who earns you the majority of your money at any one time. Your investment is to have a whole raft of people who can introduce you to your next client sitting ready in your pipeline when your existing contract ends.
Isn't that more enticing and a lot less risky?
If you'd like to learn more about referral marketing then do give me a call on 07970 638857 and let's have a chat and see how I can help you.